Judge: Michael P. Linfield, Case: 22STCP03194, Date: 2022-09-29 Tentative Ruling

Case Number: 22STCP03194    Hearing Date: September 29, 2022    Dept: 34

SUBJECT:                 Petition to Release Property from Mechanic’s Lien

Moving Party:          1122 South Hope Owner, LLC

Resp. Party:             None

Petitioner 1133 South Hope Owner, LLC’s Petition to Release Property from Mechanic’s Lien is DENIED.

I.           BACKGROUND

On August 29, 2022, Petitioner 1133 South Hope Owner, LLC filed a petition to release property from mechanic’s lien against Respondent Shangri-La Construction, LP.

On September 12 2022, Petitioner 1133 South Hope Owner, LLC served notice of the hearing to remove mechanic’s lien on Dalia Wahab, Agent for Service of Process for Respondent Shangri-La Construction, LP. (Proof of Service, filed September 12, 2022, p. 1.)

II.        ANALYSIS

A.          Legal Standard

“The claimant shall commence an action to enforce a lien within 90 days after recordation of the claim of lien. If the claimant does not commence an action to enforce the lien within that time, the claim of lien expires and is unenforceable.” (Civ. Code, § 8460(a).)

“Subdivision (a) does not apply if the claimant and owner agree to extend credit and notice of the fact and terms of the extension of credit is recorded (1) within 90 days after recordation of the claim of lien or (2) more than 90 days after recordation of the claim of lien but before a purchaser or encumbrancer for value and in good faith acquires rights in the property. In that event the claimant shall commence an action to enforce the lien within 90 days after the expiration of the credit, but in no case later than one year after completion of the work of improvement. If the claimant does not commence an action to enforce the lien within that time, the claim of lien expires and is unenforceable.” (Civ. Code, § 8460(b).)

“A petition for a release order shall be verified and shall allege all of the following:

a)          The date of recordation of the claim of lien. A certified copy of the claim of lien shall be attached to the petition.

b)          The county in which the claim of lien is recorded.

c)           The book and page or series number of the place in the official records where the claim of lien is recorded.

d)          The legal description of the property subject to the claim of lien.

e)          Whether an extension of credit has been granted under Section 8460, if so to what date, and that the time for commencement of an action to enforce the lien has expired.

f)            That the owner has given the claimant notice under Section 8482 demanding that the claimant execute and record a release of the lien and that the claimant is unable or unwilling to do so or cannot with reasonable diligence be found.

g)          Whether an action to enforce the lien is pending.

h)          Whether the owner of the property or interest in the property has filed for relief in bankruptcy or there is another restraint that prevents the claimant from commencing an action to enforce the lien.” (Civil Code, § 8484.)

B.          Discussion

Petitioner is the owner of the real property located at 1133 South Hope Street, Los Angeles, CA (the “Property”). (Petition, ¶ 1.) On February 23, 2021, Respondent “caused to be recorded against the Property a mechanic’s lien in the sum of $11,878,398.01, for labor, materials, equipment, services and/or work allegedly furnished by Respondent for a work of improvement (the “Lien”).” (Petition, ¶ 4, Ex. 1.)

Petitioner asserts that “more than ninety (90) days passed between the time that Respondent recorded its claim of lien against the Property and the date when the Respondent brought an action to foreclose on its claim of lien.” (Petition, ¶ 6.) The Lien was recorded on February 23, 2021. (Petition, ¶ 6.) Ninety days from February 23, 2021 is May 24, 2021. (Petition, ¶ 8.) No extension of credit was requested or recorded, and Petitioner demanded Respondent to remove the Lien in writing on August 3, 2022. (Petition, ¶¶ 10, 11, Ex. 2.)

Respondent identifies various procedural and substantive concerns with the instant petition. The Court addresses these concerns below.

1.           Service of the Petition Pursuant to Civil Code § 8486

Under Civil Code § 8486(b), Petitioner “shall serve a copy of the petition and a notice of hearing on the claimant at least 15 days before the hearing. Service shall be made in the same manner as service of summons, or by certified or registered mail, postage prepaid, return receipt requested, addressed to the claimant as provided in Section 8108.” Under Civil Code § 8486(c), “Notwithstanding Section 8116, when service is made by mail, service is complete on the fifth day following deposit of the petition and notice in the mail.”

Respondent alleges that under Civil Code § 8486(c), Petitioner did not complete service until September 17, 2022, or eleven days prior to the hearing, in violation of the fifteen-day deadline of Civil Code § 8486(b). (Opposition, p. 4:19-23.) Petitioner filed a Proof of Service where Douglas Forrest, a registered California process server and independent contractor declared under penalty of perjury that he served Respondent by substituted service on Monday, September 12, 2022 at 2:50 PM. (Proof of Service, filed September 12, 2022, p. 1.) Forrest attests that he served Dalia Wahab, Agent for Service of Process for Respondent by leaving the Petition and related documents with Receptionist Talin Davitian at 600 S. Figueroa Street, Suite 1888, Los Angeles, CA 90017. (Id.)

The Court finds that Petitioner served Respondent on September 12, 2022, by substituted service. Service was not completed until September 17, 2022.

Service of this petition was untimely, and hence the Petition could be denied on this ground.

2.           Inclusion of a Certified Copy of the Lien

Respondent asserts that Petitioner did not include a certified copy of the Lien as required by Civil Code § 8484(a) with the instant Petition. The Court finds a copy of the Lien in question attached to the Declaration of Trevor B. Potter that accompanies the Petition. (Potter Decl., ¶ 3, Ex. 1.) The Court finds an identical copy of the Lien attached to the Declaration of Paul A. Breucop that accompanies Respondent’s Opposition. (Breucop Decl., ¶ 3, Ex. 1.)  There is no dispute that the copy of the Lien filed with the Court is a correct copy.

To require a certified copy of the lien in this instance would be to exalt form over substance.

The Court finds that Petitioner complied with Civil Code §8484(a).

3.           Mootness

Respondent argues that the bond Petitioner recorded to release mechanic’s lien on April 6, 2022 released the property in question from its encumbrance “because the lien follows the bond.” (Opposition, p. 5:13; Civil Code § 8424(a); Breucop Decl., ¶ 5, Ex. 3.)

Respondent is correct. Under Civil Code § 8424(a) the Lien follows the bond, and the Property is unencumbered.

Therefore, this Petition is moot.

III.     CONCLUSION

Petitioner 1133 South Hope Owner, LLC’s Petition to Release Property from Mechanic’s Lien is DENIED.